When you're ASML, not even a semiconductor downturn can dent your outlook

While some in the semiconductor market are struggling, ASML, which produces chipmaking gear, has beaten its guidance for the first quarter as demand for its products exceeds capacity. The company also said it is still awaiting guidance on curbing sales to China. Netherlands-based ASML reported net income of €2.0 billion ($2.19 …

[Pascal Monett]

Stock is down ?

There are tens of billions of dollars and euros that are begging for fabs to be made. Those fabs are going to buy ASML kit.

It's time to buy ASML stock, not sell it.

[Yet Another Anonymous coward]

Re: Stock is down ?

And ASML spend 10 years and umpty billion euro developing the next magical machine - and it launches into one of those periodic semiconductor gluts

But they still have to spend 2*umpty billion on the next generation that is going to take another 10 years

It's a surprisingly tough market.

[martinusher]

A slight snag

There's a tiny issue here that might upend things. ASML is really the front end of a whole collection of companies (e.g. including Zeiss) that were effectively nominated by the semiconductor industry to produce advanced lithography machines. They didn't just develop them in a vacuum for some kind of target market, the industry as a whole developed the specifications for the machines and they got to make them. Everyone else buys them -- and they're not really a machine but a process, a process that includes an operations and maintenance staff as part of the deal, Its the ultimate expression of the build/buy tradeoff.

Our (US) government has disturbed the tradeoff. Its stuck in a world where possession of 'the blueprint' or 'the knowhow' is all you need to own the secret, something that a country like China could never master (because, of course, they're Chinese...). So they think by preventing ASML from supplying the process to 'the Chinese' that they've effectively scotched Chinese semiconductor plans. This is true, but only up to a point. The Chinese will produce their own EUV type lithography, its only a matter of 'when', and when they do ASML will find itself in a very awarkward position because the Chinese product, being "Version 2.0", is likely to be better and cheaper (having learned from experience).

Any engineer could tell these idiots this. But hubris (and a bit of racism) is capable of ignoring the obvious. So I'll just sit back with my popcorn and enjoy the show....

[Anonymous Coward]

Re: A slight snag

The really big advantage in these sorts of monopolies is that you are ahead. When the customers have a choice between your leading product, and a start-up competitor, they will take the leading one, and starve the startup of turnover and experience, so the can't catch up.

Until the customer can't buy the leading one. Then suddenly the startup gets the business and they are on their way.

China has had a bunch of areas where they can't compete in a fast improving area with the leading western specialist, despite the official desire to. Embargoes solve that. Sort term pain, but long term gain.